AUTOMOTIVE MULTIMEDIA AND COMMUNICATIONS

Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

November 18, 2012 23:10 rlanctot

The U.S. National Transportation Safety Board (NTSB) released its 2013 “Most Wanted List” of solutions for transportation hazards including everything from enhanced pipeline safety to improved safety for airport surface operations. Near the bottom of the list were three items relevant to the automotive industry: reducing distracted driving in all environments, reducing impaired driving and mandating collision avoidance technologies.

The announcement from the NTSB is reminiscent of what Abraham Maslow said in 1966: “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” I believe this statement accurately characterizes the NTSB’s position - replace "hammer" with "mandate" - but it only hints at the potential negative consequences from mandating safety technologies.

The concerns of the NTSB are significant and worthy of note.  While annual highway fatalities have been in a steady decline for the past decade, the U.S. still sees approximately 100 fatalities per day on its roads.  This is clearly not acceptable.  According to NTSB estimates 10,000 lives are lost annually to impaired drivers – the single greatest source of death and injury on the road. 

The National Highway Traffic Safety Administration (NHTSA) has developed a much quoted figure of 3,000 annual fatalities from distracted driving most often ascribed to the use of smartphones.  NHTSA representatives have stated publicly they are seeking better metrics for this phenomenon, but executives at the NTSB have already voiced their preference for a ban on mobile phones in cars – something which is opposed by the automotive industry and the Consumer Electronics Association among other interested parties.

The NTSB further estimates that run-off-road, rear-end, and lane change maneuvers account for 23%, 28%, and 9% of highway accidents, respectively. The agency says collision avoidance technologies can prevent these types of accidents - or 60% of the total.

NTSB cites data from the Insurance Institute for Highway Safety for its claims that mandating collision avoidance technologies will prevent crashes and save lives.  NTSB says the IIHS “estimates that forward collision warning can prevent 879 fatal crashes annually for passenger vehicles and 115 fatal crashes annually for large trucks. The (IIHS) estimates that lane departure warning can prevent 247 fatal crashes annually, and electronic stability control, 439 fatal crashes annually.

There are a host of issues raised by this call for a mandate and I have an alternative proposal.  First, the problems.

1)      The NTSB’s call to mandate collision avoidance technologies has immediately put automotive industry lobbyists on the defensive, although some have actually already gone into attack mode.  Unfortunately, the predictable path of resistance lies in decrying the high cost of fulfilling technology mandates, which will translate as more expensive vehicles.  The agency has responded that the industry cost estimates are too high and they will decline over time anyway.  The real problem here is that it puts the automotive industry in the awkward position of arguing indirectly or directly over the value of saved lives.  This is unproductive and corrosive to the regulatory process while introducing an undue level of emotion and exposing, inaccurately,  the auto industry as possessed of a callous disregard for human life.

2)      The IIHS as a source of statistical validation is hardly a disinterested party, funded as it is by the insurance industry.  In spite of the IIHS findings regarding the efficacy of certain safety systems, consumers have seen little reward from their insurers in the form of lower insurance rates for cars equipped with these systems.  And the IIHS was not nearly as sanguine as the NTSB regarding lane departure warning, which the IIHS said, earlier this year, can harm rather help avoid accidents, in the organizaton’s own words.

3)      The mandate process itself will require years of testing to determine the efficacy of these systems for preventing crashes and fatalities.  Even if the NTSB and the industry could agree that something should be done, each technology will require extensive testing and review virtually halting existing development in the industry - which is currently moving at a rapid pace - for fear of selecting the “wrong” solution.

4)      NHTSA has already set out a target of crash avoidance and is rewarding car makers with higher safety ratings.

 

Here are my modest proposals for resolving this scenario.  My ideas are market driven although they will benefit from

endorsement or implementation within the existing regulatory framework.

1)      Require insurers to offer discounts for vehicles equipped with the very safety systems for which the agency is seeking “robust” industry adoption.  It’s almost impossible – if not actually impossible – to find an insurer willing to offer a discount on a Volvo equipped with City Safety collision avoidance.  If this is a life-saving technology, it is time for the insurance industry to put its money on what its data has validated and it may also be time for the NTSB or some other regulator to compel such action.

2)      We are currently at the outset of the World Health Organization’s Decade of Action for Road Safety.  There couldn’t possibly be a better time for the NTSB, perhaps in concert with NHTSA, to set forth a set of targets along the lines of the Corporate Average Fuel Economy standard of 54.5 miles per gallon by 2025.  The automotive industry howled when the 54.5 mpg standard was first proposed, but has now agreed to go along.  Could the U.S. put together individual car maker targets for lives saved/deaths prevented?  Could the NTSB and or NHTSA build a database intended to identify best practices in vehicle safety system design?  Could auto makers be forced to take more responsibility for the actions and behaviors of their drivers?

3)      How about tax credits for new cars equipped with specific qualifying safety systems?

4)      It is worth noting that car makers are already bringing a wider portfolio of safety systems to more and more of their cars at lower price ranges.  Market conditions suggest that mandates at this time are almost completely unnecessary and, if anything, will only slow adoption and deployment.

There are a lot of ways to save lives and there are a lot of lives to be saved.  Mandates aren’t the only path to less motor vehicle bloodshed.  The government and insurers should recognize and reward those car makers that have made the greatest progress in ending highway mayhem.  And drivers, too, should be rewarded for choosing safety.


November 11, 2012 17:57 rlanctot

Why is Pohanka telling customers to come on in for service without an appointment? The first ads I noticed were for Chevrolet, but it soon became clear that Pohanka was making the same offer for all of the brands in its Portfolio including Honda, Toyota, Lexus and Acura. (The offer for Chevrolet is especially surprising given the OnStar Vehicle Diagnostics Report, which ought to allow dealers and consumers to anticipate needed service and schedule visits in a more predictable manner.)

The offer: “No Appointment Necessary” for service. Just drive in. In fact, Pohanka of Salisbury (http://youtu.be/GeVRCmH7bUE - Youtube) goes so far as to offer free Wi-Fi, shuttle service and refreshments.

On its face, the offer is a wonderful customer-friendly proposition. The message conveyed in the advertising: Bring your car in, regardless of what is wrong, and we will fit you in right away. You can then kick back, fire up your portable computer or tablet and set up your office in our waiting area while you have a coffee or soda or maybe even a snack. We will do our best to figure out what is wrong with your car and try to fix it on the spot.

There are so many things wrong with this proposition that it is hard to know where to start, but I’ll give it a try.

1.      Dealers need to manage their business.  The only thing worse than having idle service bays is having customers come in at unpredictable times with unpredictable vehicle problems.

2.      Dealers make money from service.  For most dealers, the service operation is the life blood of their viability.  It is where they make money.  Selling new cars is a more or less break even proposition.  For dealers to have to advertise to consumers to bring their cars in suggests a vision of a bunch of idle wrench twisters hopelessly looking for and pleading for something to do.  (Maybe the cars aren’t breaking down?  Yeah, right.)  Something must be very wrong for dealers to advertise in this way.

3.      My dentist makes me wait.  My accountant makes me wait.  Everyone makes me wait.  My dealer used to make me wait.  What’s changed?  The service cycles for preventative maintenance are growing, so it is true that consumers have less reason to pay frequent visits to dealers.  But, at the same time, cars are lasting longer and consumers are holding on to them longer, according to R.L.Polk (http://bit.ly/Z9VKgQ - Length of Vehicle Ownership Hits Record High).  This means that consumers are likely shifting their vehicle servicing to independents (a fact borne out by studies from the Automotive Aftermarket Industry Association) and/or deferring service.

A couple of things could be happening at Pohanka dealerships.  Perhaps the company has decided to up its game by changing the message from one of playing hard to get (“We can see you next week.”) to an open door (“Come on in!”).  I actually welcome that message as a vehicle owner with not infrequent needs for vehicle service.  And I DO respect and appreciate the offer of Wi-Fi access and snacks, though I’d prefer a loaner car to get back to my own office.

I am concerned, though, that the offer actually reflects what is wrong with the automotive industry and something that is putting the health of 30,000+ new car retailers at risk.   With no direct connection, via OEM telematics systems or connected smartphones, to their customers, dealers are forced to take a blunderbuss approach to marketing.

New car owners in the U.S. are familiar with the post card marketing used by most dealers targeted at scheduled service benchmarks normally based on estimated vehicle usage.  GM, BMW and Mercedes have taken the first tentative steps to allow dealers to be notified of mileage thresholds triggering scheduled maintenance.

A new solution based on connectivity and tied to interpreting vehicle data is required.  Dealers shouldn’t have to resort to the equivalent of hitching up their skirts by the side of the road.  Dealers need a more scientific and targeted model built around vehicle connectivity.

Vehicles throwing off error or failure codes should be communicating those codes to OEMs, dealers AND the consumer.  In fact, on-board service scheduling like that enabled by xtime on BlueLink-equipped Hyundai vehicles is the new benchmark for customer integration.

In the future, connected cars will enable connected dealers to plan their marketing campaigns around the status of their “fleet” of connected cars.  This kind of planning will enable more efficient use of fixed assets – those service bays – and timely ordering of the necessary parts.  Dealers will also be better able to go after deferred maintenance opportunities.

At the recent SEMA/AAPEX gathering in Las Vegas multiple aftermarket players showed smartphone- and OBDII-based systems for interpreting vehicle diagnostic codes for the purpose of capturing service opportunities.  (http://bit.ly/RNpYne - AAPEX Seminar: Telematics presents the automotive aftermarket new challenges and opportunities)  OEMs may be making progress, but the aftermarket is not sitting idly by.

It’s still early days for bringing dealers into tighter communication with their customers.  But this Pohanka come-on-down offer is a sign of the coming apocalypse for any OEM that is not working to better connect the dealer to the customer and the car, or any dealer that is not investigating aftermarket customer connectivity propositions.  Until this problem is solved, I’ll be popping in to my Pohanka dealer without bothering to call, sucking down a few sodas and soaking up the free Wi-Fi.  But as an industry, we can do better.


November 6, 2012 20:02 rlanctot

A traffic tempest has erupted in a Washington, DC, teapot. The leading local broadcast traffic information provider, WTOP “with as many as 20 full- and part-time reporters,” in the words of one blogger, has “outed” local broadcast competitor, NPR affiliate WAMU, for using a remote traffic reporter – Jerry Edwards, previously seen regularly on NBC’s Channel 4 until his retirement in June 2011. Edwards is reporting DC traffic for WAMU from his home in Sarasota, Fla., where he moved after selling his home in Maryland, according to a Washington Post report.

The Washington Post reported the not unusual traffic reporting scenario on Sunday, November 4th (http://wapo.st/PRFfoy), which was followed by a blog on the topic (http://bit.ly/R9km4Y). At issue is whether a traffic reporting organization needs a physical presence in the market where it is reporting traffic.

With millions of advertising dollars at stake, the question is not a trivial one and it touches every organization from the local news-radio station to the state Department of Transportation, to traffic content providers and, yes, Google. Timely and accurate traffic reporting is vital to the management and movement of traffic around metropolitan areas and the guidance provided via navigation applications.

Location, location, location

The idea boils down to whether traffic can be adequately reported and interpreted from a distance or requires on the ground information gathering – that is, on top of in-place cameras and sensors and public reporting of incidents. WAMU has clearly voted in favor of remote traffic reporting. WTOP is insisting on the merits of local traffic reporting.

WAMU has a lot of company in the remote report category. Nokia Location & Commerce spun off its media assets more than a year ago in the form of Radiate Media. Radiate Media enables remote traffic reporting by providing access to real-time traffic and probe data with inputs from various DOTs, and incident and event data from “fully staffed operations centers” with 24/7 technical support, according to the company’s Website.

Actually, Radiate Media’s arrival coincided with the closing of many of the original Traffic.com local traffic reporting offices, such that most of Radiate’s activities are coordinated between Chicago and its Salt Lake City headquarters. Traffic.com was the traffic reporting company acquired by Navteq years prior to its acquisition by Nokia.

The remote traffic reporting philosophy is also supported by companies such as Google (handset GPS probes), Airsage (network signaling), and Trafficland (DOT cameras). Each of these companies views its technique-dependent solution as either the ideal approach to traffic reporting or as good enough. While some of these organizations provide predictive traffic modeling based on their single-sourced data, they all emphasize real-time traffic information.

This analyst has trumpeted the value of hyper-local insights regarding all aspects of location information. Traffic is no exception. But it is difficult though not impossible to offer hyper local traffic insights from more than 900 miles away, as WAMU is trying to do. It all depends on the input sources.

Better is the enemy of good enough

But the traffic data market is a classic case of better being the enemy of good enough. The only problem is convincing consumers that there is a better solution when they are content to get by with good enough. Worse, good enough solutions have sown despair among some traffic information users seeking truly helpful information. These are the people who regard traffic and weather as equally unpredictable – recent well-anticipated East Coast events notwithstanding.

WTOP has taken up the gauntlet of delivering better traffic information. The station approaches traffic as “a major news-gathering undertaking,” in the words of the blogger.

But WTOP’s commitment to authenticity and local reporting faces a steep challenge as a value proposition when information regarding traffic incidents and road conditions are freely and publicly available to all on the radio and via smartphone apps.  The station emphasizes its 24/7 commitment in personnel and information integration aided by listeners who call in to describe what they are seeing on the roads.

If you care about traffic in DC, you listen to WTOP

The WTOP effort is surprisingly analog, with individuals reporting traffic events live as they unfold, in a world dominated by digital inputs.  If you care about traffic in the DC area, you listen to WTOP.

WTOP executives further note that “there are no traffic cameras on federally controlled highways” and “a good percentage” of traffic cameras in the area are out of service at any given time. It is worth noting that Clear Channel’s Total Traffic Network, which maintains a regional office in Silver Spring, Md., maintains its own traffic camera network.

In fact, it is curious that the WTOP-WAMU contretemps almost completely omitted mention of Clear Channel. Clear Channel Communication’s Total Traffic Network maintains the largest private traffic monitoring network in the U.S., with 16 regional traffic hubs operating 24/7 and 10 smaller satellite offices.  TTN also maintains a proprietary network of traffic cameras as well as some aircraft all feeding the company’s TrafficNet internal traffic data platform which in turn feeds services including SigAlert as well as embedded navigation systems.

The challenge for all lies in the fact that with improvements in technology come parallel improvements in both local and remote traffic reporting. Different types of traffic information offer different value propositions for different users.

Casual observers of traffic information online, on the radio or on TV, may be satisfied with a general overview of conditions, while people driving in cars or navigating to a specific destination will not only want more timely and accurate information they will also need predictive traffic information, whether they are conscious of that need or not.

The increasing importance of traffic information, in a world of increasingly clogged highways, has stimulated interest in traffic information. What is unfolding today is a process of traffic information user education.

For some, remote traffic reporting will be okay. The WAMU solution is not unlike the Inrix-developed traffic app within the Aha Radio service from Harman. The app converts traffic flow information into speech output integrated with relevant local event notifications. It is a good enough solution.

The debate between WAMU and WTOP has implications for satellite radio broadcaster SiriusXM. Long considered a provider of good enough subscription-based traffic information, SiriusXM is in the midst of an extended process of determining a new way forward with a better traffic solution to preserve and expand its lucrative subscriber base.  When consumers are paying for traffic data as in the case of SiriusXM good enough can suddenly become not good enough.

Traffic data evolution continues

New and improved (Bluetooth) sensor data is on the way into the market from multiple suppliers fulfilling individual municipal and DOT contracts. Also on the way are traffic cameras enhanced with object and license plate recognition technology. With more embedded telematics systems will come improvements in vehicle probe inputs as well as systems and apps, such as Waze, that enable user-generated inputs and observations.

Traffic information suppliers are also moving steadily toward digital radio and IP-based TPEG traffic information that vastly increases the amount of traffic information that can be transmitted while enabling greater granularity in the identification of congestion location. And while some suggest, perhaps sarcastically, that drones would be helpful in interpreting traffic events and conditions it is no joke that drones could well replace helicopters – of which there are precious few today, replaced by cameras – to monitor choke points.

Implications

As George Harrison once sang: “It’s all up to what you value.” If traffic information is not mission critical to you or your organization you will not care about Jerry Edwards delivering the traffic news remotely. The important thing to know about traffic is that the nature and value of traffic information is changing every day.

There is an increasingly diverse array of traffic information sources and a steady shift toward higher frequency, higher bandwidth, higher resolution sources of traffic information obtained over fatter, faster pipes. The information is being interpreted on increasingly powerful computers with increasingly sophisticated algorithms capable of integrating an ever-expanding array of data types.

The last mile of traffic data delivery can be anything from an app to a radio or TV broadcast or Internet feed. Or the traffic information could simply be operating in the background of an off-board navigation solution fine tuning optimal routes for avoiding traffic.

Digital traffic resources are increasingly challenging analog human traffic reporters. Will digital “eyes” ever completely replace the human eye? Maybe. But until that happens, WTOP remains one of the best traffic information service providers in the country and WAMU’s traffic information is probably good enough for most.


September 18, 2012 19:21 rlanctot

In August Fiat launched Fiat Social Drive a smartphone-based app intended to leverage the already available Blue&Me Bluetooth offering in Brazil. Available initially for free for two years on the MY2013 Fiat Punto, Fiat Social Drive allows the user to dial into an application that provides notifications and updates from the user’s social networking applications.

Created by Leo Burnett Tailor Made and Agency Click Isobar in Sao Paulo, the new application was advertised for the first time in August in Brazil (http://www.meioemensagem.com.br/home/comunicacao/noticias/2012/08/06/Fiat-apresenta-novo-Punto-com-Social-Drive.html - video). A user of the application can access it by creating an account using their phone or a computer.

To create an account the user needs his or her Fiat VIN number and as part of the registration process will receive a call on the mobile phone with a code. The next step involves configuring the account to the user’s preferences including selecting which friends to access via Facebook, Twitter and Foursquare and which kinds of information or notifications to receive via the application.

The user then saves the phone number for Social Drive in the phone’s directory and calls any time they want to connect with Social Drive.  A dealer visited in Sao Paulo last week did not have any further details and Fiat has not put a price on the application which appears intended to draw attention to Blue&Me functionality.

The notifications are delivered to the car via MMS and delivered to the driver via voice. There is no means provided for the driver to respond to the notifications for such things as news, birthdays, weddings, check-ins and posts. It is the first application of its kind for the Brazilian market, but likely the first of many with GM bringing MyLink Brazil and Ford launching SYNC in the market.

A video description of the service is available on LinkedIn: http://youtu.be/4V_PkjHpgNM


September 6, 2012 06:35 rlanctot

OnStar announces its next global launch today as Mexico in 2013, validating Strategy Analytics' analysis when OnStar announced Telefonica as its partner for global expansion earlier this year (http://bit.ly/ORVLii - OnStar Reveals Regional Priorities with Telefonica Selection). Details regarding cars, services, partners and pricing have not yet been announced, but the move will likely serve as a proving ground for faster future market introductions anticipated for larger more strategic markets including Brazil and Europe.

Mexico is GM's fifth largest global market with slightly more than 160,000 units sold in 2011.  Brazil represents approximately four times the volume in Mexico, but given the government's Contran 245 mandate (http://bit.ly/ORYR5S - Brazil: The Embrace of Wireless Technologies Transforms the Telematics Market) for vehicle tracking and immobilization - which has been delayed for the 10th time until January 2013 - it makes sense for GM to proceed with caution. (The rollout in Mexico also allows GM to give its new ATOMS telematics platform a dry run with a GSM network.)

The same is true for Europe, where the eCall mandate has frozen many telematics deployment plans while legal and privacy issues are resolved along with logistical issues related to equipping public service access points with required technology. (http://bit.ly/tunyIL - European eCall Mandate Aims Low, Falls Short) In the end, it is highly likely that OnStar, when it arrives on European shores, will do so as a private solution working in parallel with the public eCall - unfortunately.

General Motors, meanwhile, is on a roll, posting steady sales increases throughout the world, according to the latest sales press release reported by the GMAuthority newsletter (graphic below). No doubt OnStar wants to join and add to that momentum with its value-added vehicle connectivity platform.

The launch of the ATOMS telematics infrastructure platform earlier this year by GM/OnStar has set the stage for rapid global deployment and growth for the service. (http://bit.ly/IpSRmf - OnStar Looks to Unify Connectivity Strategy) Mexico will clearly represent the acid test, serving as a dry run for country rollouts to come as well as a proving ground for the switch to GSM technology.


August 29, 2012 19:49 rlanctot

The automotive collision repair business in the U.S. grew 3.3% in 2011 to $38.7B, in spite of a decline in miles driven and the number of collisions, according to the latest report from the Automotive Aftermarket Industry Association. Cars are lasting longer, being driven less and getting in fewer accidents, the report notes, citing multiple insurance and automotive industry sources.

The 2012 edition of the AAIA’s Digital Collision Repair Trends: Industry Statistics & Analysis arrives just a week before Telematics Update’s Insurance Telematics event in Chicago. Insurance and automotive industry executives will convene next week to discuss usage-based insurance and the insurance implications of car sharing and EVs, among other topics.

The AAIA is most focused on the concerns of the independent car repair shop industry, of which there were 40,279 as of 2011, down from 46,700 in 2001, according to the report. Insurers and independent car repair shops generally share the same objectives.

Not all car dealers embrace the collision repair business, but for most it is an essential element in their revenue portfolio. Every OEM wants to see its cars repaired with genuine OEM parts. The accident aftercare business is a strategic one for both new car dealers and OEMs and telematics – a topic not covered in the AAIA report – can serve as a lead generating device for the dealer channel.

The study reports that the average number of vehicle miles driven declined in 2008 for the first time in two decades. The total was 2.96 trillion miles in 2011, down 1.2% from 2010. Roadway congestion has also leveled off, according to the report.

The declining rate of vehicle usage has likely contributed to declining collision rates and declining insurance claims, both of which are cause for concern to both insurers and repair shops. Most of this decline is coming in the developed world where more well-equipped cars are available with better educated drivers. In developing markets around the world rising levels of vehicle ownership have brought to the fore issues of security, theft and rising accident rates setting the stage for very different insurance priorities. (Preventing fraud has also emerged as a core issue throughout Europe.)

The proliferation of collision avoidance technologies including adaptive cruise control, blindspot detection, back-up cameras and lane departure warning have certainly contributed to the decline in collisions in the developed world. But the U.S. saw a slight uptick in vehicle ownership last year after a leveling off between 2008 and 2010 – rising slightly to 240.5M vehicles in 2011, according to data from Polk, which was a contributor to the report. More cars usually translates to more miles driven and more accidents.

Polk also contributed average vehicle age data to the study. Polk reports that the average car on the road in the U.S. is 11.1 years old, continuing a steady unbroken yearly rise from 8.4 years in 1995. Polk analysts say that the U.S. can expect to see the overall rate of vehicle ownership to resume its climb as the economy recovers and that the average age of a car will peak.

Vehicle age is a critical factor in determining the repair destination. AAIA says that slightly more than one in three (36.9%) of vehicles in the one year-old category have its collision repair work performed at new car dealerships. The percentage drops substantially after the first year as consumers seek independent repair channels to fulfill their collision repair needs.

So the megatrends represent a mixed bag of good news and bad news for independent repair shops. Cars that last longer are more likely to be brought to an independent repair shop for repairs, but not if there are fewer accidents.

AAIA says that in 2010, independent repair shops contributed 86.3 percent of total sales in the collision repair industry, with dealership body shops making up only 13.7% of total sales. “Previous experience” and “convenience” were the most important factors in selecting an outlet for collision repair work, the study states.

Insurers and independent repair shops have a common cause in capturing a larger chunk of the collision aftercare market. For new car dealers, the best opportunity lies in leveraging vehicle connectivity technology to better identify, respond to and capture post-collision opportunities.

Telematics has a role to play in this scenario, but no car maker has found the solution to this challenge yet. Until OEMs can solve this problem their aftersales divisions will continue to miss out on billions of dollars in revenue while dealers battle insurers and independent shops for profitable collision repair opportunities.


August 23, 2012 14:30 rlanctot

The news from General Motors, reported by the GMAuthority a week ago, was that 1,849 Volts were sold in July a 125% increase over the year ago period and a 100-unit improvement compared to June 2012. I couldn’t be happier to hear some good news about the Volt – with its clever dual-mode, extended-range powertrain, but the GMAuthority report proceeded to tout the minimal sales of Volts to “fleets.”

For some reason the word “fleet” continues to be a dirty word in Detroit and other automotive capitols, at least in North America. When an automotive executive hears “fleet” the normal association is to rental car fleets where cars are sold at steep discounts to clear out inventories and make up for shortfalls in retail sales.

There is another kind of fleet business, which is commercial fleets, and commercial fleets are increasingly interested in green technologies as represented by the Chevy Volt. The roster of corporate incentives for private employee vehicle purchasing is growing (See: http://www.hybridcars.com/corporate-incentives.html) but GM remains on the outside looking in.

GM remains locked in an out-of-date mindset that associates fleet sales with all things negative. The Volt, now in its third year, may be outselling the Nissan Leaf but it is no secret that the sales volumes for this innovative and cosmetically attractive and socially acceptable green machine have been disappointing. It is also no surprise that most of the executives responsible for the initiative from its inception have been exiled from GM, with many joining competitors - including some that touted fleet sales.

The Volt accounted for 10,666 units sold in the first seven months of 2012, a 270% increase over the same time period last year. The Leaf moved 3,543 units, down 26.3%. Both figures were reported by GMAuthority.

GMAuthority further notes that Volt sales have gotten a lift in California where the state has granted solo access to carpool lanes for Volts – adding that “about 1 in 3 Volts are now sold in the Golden State.” This local demand translates to a 34-day supply of Volts in California vs. a 52-day supply everywhere else.

In a separate bulletin from GMAuthority, the news source comments on attractive new lease rates for Volts. All of these efforts have the flavor of too-little-too-late to make the Volt the kind of viral success it was intended to be.

I still nearly catch my breath every time I see a Volt on the road - partially because it is such a rare occurrence. The attractive styling – in contrast with the dowdy Leaf and Toyota Prius – combined with the ecological cred still imparts a powerful aura to the car. But steep dealer markups in its early restricted availability days and the cold shoulder turned to the corporate fleet market have consigned this loss-producing car to a highway heading to nowheresville.

It’s not too late for GM to wake up to the private/retail sales opportunities in the corporate marketplace. But it is a shame to consider the thousands of units in potential sales that have already been lost.


August 20, 2012 15:12 rlanctot

Sometimes a company does something so wrong-headed it is impossible to ignore. The normally very clever executives at Scosche - pioneers in automotive infotainment system integration - have announced their plans to re-enter the car stereo market with a head unit that enables use of the mobile phone as a remote control, according to a report in the CEOutlook newsletter (http://bit.ly/RbDe4k - Scosche Debuts Car Radio at KnowledgeFest). Even worse, Sony has similar plans for 2013.

At a time when U.S. government regulators are threatening to disable the use of mobile phones in cars altogether to mitigate distracted driving, Scosche is launching a system that encourages the driver to use his or her mobile phones as a remote control for the car stereo. The whole objective of OEM automotive engineering efforts around integrating mobile phones in the car for the past eight years or more has been to shift control of the phone to the vehicle HMI.  The over-arching message to consumers: Don't touch your phone when you are driving.

Somehow, Scosche has seen fit to affect an industry U-turn to shift control back to the phone. Scosche has also somehow missed the tidal wave of headlines pronouncing the imminent arrival of Apple’s Siri voice interface for automotive aftermarket integration, along with competing solutions from Nuance, AT&T and others.  The goal, again, control the phone with the vehicle HMI - steering wheel controls, voice, head unit touch screen, hardware controller.

The only possible good news perceivable in this announcement is that it will shine a white hot light on aftermarket remote controls and, maybe, clarify the need for some industry soul searching as to the efficacy of these systems in a voice-enabled in-vehicle interface future. I have a lot of respect for Scosche and I am confident they will recognize their bungle and get a Siri or some other kind of voice-based interface in the box with their new systems before they launch.


July 29, 2012 22:12 rlanctot

Ten years into the current smartphone revolution some people and organizations still do not realize what is happening. Nowhere is this more apparent than in the automotive industry where regulators and industry associations continue to take a top down approach trying to build consensus and promote mandates in a market in the throes of being recreated from the bottom up by massive mobile device disruption.

Disruptive change is coming from the radiating ripple effect of global smartphone adoption transforming consumer behavior and content and application consumption patterns.  For the automotive industry, the latest twist on this disruption is the rapid proliferation of Wi-Fi and Bluetooth technologies on mobile devices.

Wi-Fi and Bluetooth wireless technologies are disrupting everything from traffic data gathering to content consumption and, most recently, safety.  Smartphone users have seen their use of mobile phones in cars changed by Bluetooth hands-free interfaces (HFI) and have tapped audio streams through their car stereos with Bluetooth’s advanced audio distribution profile (A2DP),.   Now Wi-Fi Direct has emerged to change safety.

And GM has emerged as the Pied Piper of Wi-Fi Direct after revealing its own internal studies demonstrating how Wi-Fi Direct technology in cars might be used to detect the presence of pedestrians’ smartphones by detecting their Wi-Fi signals.  (http://bit.ly/MM47w9 -How Your Smartphone Could Stop a Car From Running You Over)  In this way, Wi-Fi Direct could be used as an enhancement to existing sensor-based safety systems to help drivers avoid pedestrians – or to at least be alerted to their presence – in a low-latency sub-second manner – without connecting to a wireless cellular network.

V2X via smartphone integration

The announcement of GM's new findings follows a presentation at Telematics Update V2X for Auto Safety and Mobility 2012 in Novi, Mich., where GM engineer Donald Grimm presented a vision of V2X technology deployment via aftermarket devices and smartphones.  The new Wi-Fi Direct concept from GM published last week solves a problem raised by attendees of the TU event, regarding the detection of pedestrians in a V2X-enhanced world built around Digital Short Range Communication technology – the 802;11p-based technology upon which V2X is being defined.

DSRC-equipped cars will have no way of detecting pedestrians.  But Wi-Fi Direct-enhanced cars will have this ability and in fact could deliver this technology today.

By swapping DSRC technology for Wi-Fi Direct, GM is highlighting the shortcomings of DSRC technology, the adoption of which has created a chicken and egg scenario.  DSRC technology will work best once all cars equipped with the technology to enable enhanced traffic and collision avoidance applications.

But DSRC technology has no subscription or revenue component, making it an expensive vehicle enhancement requiring additional hardware, software and enabling infrastructure. To succeed, DSRC is ikely to require a top down government mandate and a homogenization of global standards to take hold.  GM is pointing the way toward a life-saving technology already widely distributed among consumers on their mobile devices.

In the presentation given at the TU event earlier this year, the GM engineer suggested the possibility of DSRC technology being built into smartphones – a clever but expensive and pointless exercise, particular in light of Wi-Fi Direct’s availability.  Further impairing the vision of smartphone deployment of DSRC are issues of power consumption and in-vehicle docking of the device.

The beauty of the new GM proposition is its use of existing devices – smartphones – and existing standards-based technology – Wi-Fi Direct – to save lives without the creation of new standards, new hardware or new mandates.  Bike messengers and pedestrians wanting to take advantage of the new technology might be able to install an app to enhance the sensing process.

Implications

The rapid adoption of Wi-Fi Direct will get far greater impetus in a competitive environment, such as that implied by GM’s research and potential implementation, than by a collaborative standards-setting activity such as that associated with the ongoing V2X activities or the mandate approach characterized by Europe’s ill-conceived eCall initiative.  GM researchers are proposing that cars simply tap into the surrounding wireless signaling environment to help avoid collisions.

In a similar way, roadside Bluetooth sensors are increasingly being deployed by organizations such as TrafficCast, Siemens and others to glean highly accurate insights regarding traffic flow from passing motorists and their Bluetooth-equipped smartphones.  There are wider implications and a growing roster of new applications enabled by this ad hoc sensing process.

The most important takeaway of all, of course, is the critical role of the smartphone as a self-contained safety system in the car.  A Bluetooth- and Wi-Fi Direct-enhanced device is capable wirelessly communicating its location up to 600 feet away as well as sensing nearby devices.

This sensing and contextual awareness has life-saving implications for drivers and pedestrians and the differentiating market development opportunities are emerging faster than an application download.  It is for this very reason that open application platforms in cars in the form of smartphone interfaces are so important.

In an ironic twist, the deployment of safety systems taking advantage of Wi-Fi Direct signaling are likely to benefit from existing research into DSRC signal propagation and interpretation.  So all that DSRC work won’t be going to waste.

The scanning for the presence of pedestrians is clearly a local, on-board application in the car, but there will be opportunities to process the sensor inputs in a cloud platform for added value insights.  And it is likely that such a system will need upgrades or updates on a regular basis as enhancements to the detection algorithms are discovered.

It’s just another way smartphones are driving live-saving changes from the bottom up, rather than from the top down.  Wi-Fi Direct can save lives, but not if smartphones are banned or their functionality is compromised.


July 28, 2012 01:26 rlanctot
The latest news from the world of peer-to-peer car sharing was the announcement of the formal launch of RelayRides’ cooperation with OnStar. The partnership allows RelayRides members to make use of OnStar’s newly introduced open APIs to enable a car sharing experience without key sharing.
The announcement demonstrates the power of OnStar’s open API strategy while opening the door for owners of OnStar-equipped vehicles to the world of “autopreneurship,” to steal a made up word from the founder and CEO of France’s Buzzcar (and co-founder of ZipCar).  RelayRides regularly touts the ability of its members to rake in $600 or more per month from car sharing – a potentially mind changing prospect for car sharing skeptics, of which there are many.
(It’s worth noting that the Buzzcar car sharing model in France is of the peer-to-peer variety, not the corporate ZipCar or Car2Go approach.  The company is oriented toward face-to-face car sharing within local neighborhoods and communities.)
The emergence of the peer-to-peer model was enabled in part by vehicle connectivity technology, so the OnStar relationship makes sense.  Services such as RelayRides, GetAround and Wheelz initially required hardware to be added to cars to provide for card-based vehicle access, billing and in-vehicle storage of the physical key.  The on-board hardware also provided vehicle security and tracking.
Moving away from hardware
But services such as Buzzcar, Whipcar, Voiturelib and, now, RelayRides are moving away from a hardware-based model.  One reason, say industry participants, is the low frequency of rentals.  Only a high frequency model really justifies the installation of expensive hardware – normally provided at no cost to the car sharer.
An essential element of the new peer-to-peer model was the provision of a corporate umbrella in the form of RelayRides or GetAround to underwrite insurance, check and maintain membership credentials, handle billing and help connect car sharers with potential customers.  Several of the services integrate Facebook and Paypal into their solutions to support these functions.
The latest trend, though, is toward hardware-free vehicle sharing but with the requirement of a key exchange.  The peer-to-peer services – with or without hardware - are designed as an alternative to the corporate programs of ZipCar and Car2Go.
Hardware preferred for high frequency, low friction
One emerging player that is maintaining the hardware focus is Wheelz, currently available on four university campuses in California.  Wheelz, like RelayRides, is intended to enable and stimulate a “low friction” process for frequent vehicle rentals capable of generating significant revenue for the car sharer.  Students have lavished praise on the Wheelz model, according to company executives, including some who are using Wheelz to defray college expenses. 
Those sentiments are significant because ZipCar, an investor in Wheelz, has focused on college campuses with more than 250 universities around the U.S. equipped with ZipCar offerings.  (Bill Ford's Fontinalis Partners is another leading investor in Wheelz.) University students are an ideal captive audience of potential users seeking low frequency, short distance, temporary rides often in an urban setting. 
This also explains why car sharing is attractive for use around corporate campuses or for homeowners associations.  These settings provide a captive audience with a shared interest in car sharing.
Insurance remains an unresolved challenge
In addition to a communal shared interest, another essential element of the P2P car sharing proposition is insurance and it is as yet unresolved.  While the corporate parents offer various forms of protection for the sharer and the driver, there are a variety of unresolved issues, particularly in the U.S. where car insurance is a state by state scenario.  California, Washington and Oregon have stepped in to pass laws to allow the corporate parents to provide coverage for car damage or theft or for injuries or fatalities to drivers or others.
Published reports have revealed, however, that many insurance companies will not cover for damages caused when a vehicle is in commercial use.  Some insurers have been quoted as saying that their policies do not provide for such commercial uses and others have said they would drop coverage for anyone participating in these programs.
Despite this lack of support and the fragmented regulatory environment in the U.S., car sharing is being embraced around the world.  The peer-to-peer model is especially important, according to multiple industry participants, because of the personal or community connection of the car sharer and the driver.
In the new world of car sharing – part of the so-called “access economy” or “collaborative consumption” – participants are less inclined to abuse that which they are “borrowing” from a member of the same community.  (Car sharing is analogous to home rentals popularized by Airbnb.)  In contrast to Airbnb, however, the car sharing relationship of the face-to-face variety is even less likely to incur abuse of the asset since, unlike an Airbnb rental, the car sharer in the case of Buzzcar, for example, is likely to rent the same car from the same neighbor multiple times.
New telematics value proposition
For OnStar, the RelayRides relationship is a way to enable a new value proposition on the telematics platform.  OnStar will allow owners of GM cars to make money sharing their car.  At the same time, the RelayRides proposition can attract lapsed OnStar subscribers to restore their $19/month subscriptions to take advantage of the new service.
Of course, OnStar’s open APIs are intended to enable an unlimited range of new applications capable of adding value to the telematics platform and enable the service to retain existing subscribers, lure back past subscribers and reduce service churn.
At stake for OnStar is a total potential user population – approximately six million subscribers plus approximately nine million with hardware but no active subscription – of 14M-15M vehicles.  All that is required to enable the RelayRides experience is to reactivate the $19/month subscription to enable access to the GPS location technology and remote door unlock function.
In essence, OnStar replaces the RelayRides hardware.  But RelayRides, like other P2P services, is moving away from the hardware requirement, which is provided and installed at no cost to the driver.
Can RelayRides and OnStar build user communities?
The no hardware move by RelayRides, part of the company’s attempt to be the first to take the service national, opens up participation to any and all who may want to join.  The challenge for RelayRides, though, will be to build community nationwide.  The trade-off for an OnStar customer reactivating his or her subscription to enable RelayRides sharing is whether the potential revenue enabled by the “low friction” rental experience justifies the monthly subscription.
The pursuit of communities of shared interest, as in the university campus deployments, reflects the “special sauce” of car sharing: serving a collective good.  RelayRides, and by extension OnStar, are likely to face challenges stimulating the same community by opening the offer to the entire U.S.   It may also make it harder to fine tune the RelayRides car sharing model with the company immediately exposed to regional driving preferences spanning the country.
The OnStar relationship has the potential to enable a more viral expansion of RelayRides with the support of such a large corporate partner.  It also opens GM up to a new market segment and, possibly, new customer relationships.  Checking available RelayRides in my neighborhood revealed a paucity of GM vehicles, suggesting that GM – by tying up with RelayRides – is tapping into an entirely new demographic segment.
A lack of marketing
But the lack of any targeted broadcast advertising or even a social media campaign suggests that GM has yet to determine how it wants to tap into the new relationship.  In the end, the OnStar/RelayRides deal will only work if GM and/or RelayRides are able to build communities of users around the new program now that the infrastructure is in place.  This suggests a go-slow approach, which is a good way to characterize the growth of car sharing overall.
Perhaps more importantly, the RelayRides relationship launches GM into the realm of new modes of vehicle ownership in a world where young people are beginning to eschew driver’s licenses, according to a study released last week by the University of Michigan.  Parents could send their children off to college with a new GM car and OnStar and RelayRides subscriptions.
Implications
The opportunities for both RelayRides and OnStar are substantial.  Thus far car sharing services have been fairly limited in scope and, as a result, represent only a tiny proportion of vehicles on the road. 
One of the barriers to the adoption of car sharing has been the insurance implications along with people’s unwillingness to share.  With the onset of the collaborative consumption culture along with economic pressures and the changing demographics of vehicle ownership, the stage is set for a wider embrace of vehicle sharing.
Some in the industry suggest this is the main motivation behind car company interest in car sharing.  With increasing urbanization, the thinking goes, and early indications of declining rates of vehicle ownership, the industry is seeking to hedge its vehicle ownership bets.
The volume of cars that are currently registered in car sharing programs remains small, but these are early days and now is the time to gather information regarding vehicle sharing behavior and requirements.  Car sharing is enabling the ultimate on-demand model for vehicle ownership, while maximizing the productive use of an asset that is likely to endure for more than 10 years.
The vision unfolding at RelayRides is of car sharing on a mass scale, unlimited to a particular city, state or college campus.  Entering any zip code into the RelayRides Internet interface will produce a roster of available cars within a few miles being shared by nearby neighbors.
The OnStar relationship has the potential to open up an even larger spigot by allowing subscribers to leverage their existing OnStar subscription to produce income from an otherwise idle vehicle.  The RelayRides value proposition is a potentially powerful ownership alternative for GM dealers to share with customers and may even set the stage for dealers to establish vehicle sharing businesses of their own.
It might be useful if GM were to help RelayRides, and the industry, sort out the insurance issue.  Other car sharing organizations have been more cautious in their expansion plans because of the state-by-state insurance issues.  It is not clear that RelayRides has satisfactorily resolved this issue – in spite of already offering a nationwide program. 
If the insurance issue can be resolved in the U.S. and elsewhere, P2P and corporate car sharing plans hve the potential to resolve a wide range of issues around the wider challenge of urban mobility, traffic congestion and pollution.  Ultimately, car ownership may be reduced to a pay-per-use scenario.
In some respects it is amazing that car companies such as GM and Daimler (Car2go) have embraced car sharing since the number of vehicles involved is so low and it directly impacts vehicle sales.  What is more likely is that the negative impact on vehicle sales is, in fact, a short-sighted perspective.
With the enhancement of a connected vehicle platform, car sharing becomes a telematics value add and may, in fact, expose the non-car-owning population to the car owning experience.  Maybe by enabling car sharing car companies will stimulate wider car ownership. 
The more likely scenario is that car sharing is the precursor to a redefined vehicle ownership experience sweeping developed countries and fundamentally altering industry economics.  The rosy version of this vision suggests greater revenue and profit opportunities for OEMs in this brave new world if OEMs are able to cultivate their piece of the action.
The greatest challenge for GM/OnStar will be building user communities around the car sharing application.  Judging by the limited participation of GM vehicle owners in the current RelayRides offering, GM has a great deal of work to do to leverage the RelayRides platform.  The RelayRides relationship is a real test of GM's ability to adopt new thinking and, potentially, put its traditional vehicle sales model at risk.